Funadmental traders look for reasons why; technical traders look for where and when.
Today’s narrow range finally broke in the afternoon, and the market ratcheted backward testing lower support. Emotional traders who do not understand the potential dynamics of expiration week were whipsawed.
Switching gears from range trading to a breakout mentality requires flexiility in our thinking. Rigidly adhereing to a posture that stops working is a recipe for disaster.
Understanding the secret code allows us to anticipate where suspected turning points should be located. Whether they acually turn there or not of course, is anyone’s guess. The odds are on our side however, when we know where the invisible fence is.
The 05 gap never filled today, and acted as resistance during regular hours. Profit taking was the order of the day, as nothing goes straight up or down in a straight line.
Besides fibonacci, there are a number of other mathematical relationships that need to be reconciled. Paying attention to key numbers in different time frames allows us to see patterns as they emerge.
Locomtion has a rhythm, and its up to us to find it. It is not as simple as understanding the laws of physics; if we are going to win this game we must also comprehend the concept of stops being hit, then the market going without us and making us chase it.
Having the right tools is imperative in any business, especially ours. Besides the right analysis, emotional control, and capital, we need the right computer and monitor set up. Take a look here for some great ideas.
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